Two states strike down “Amazon tax”

posted at 12:31 pm on April 29, 2012 by Jazz Shaw

Last winter we opened up a discussion on the Marketplace Fairness Act and the idea of the federal government forcing companies such as Amazon and eBay to collect a sales tax on internet sales. The response was almost uniformly negative here, with one of the most popular proposed alternatives being the idea of letting the states deal with the issue themselves. I have to admit that the idea carried some appeal for me as well, at least at first glance. And it turns out that several states had already begun exploring precisely such a solution.

As you would expect, the internet retailers immediately got together and began challenging these new state taxes in court. The first two to make it to the top of the docket were in Colorado and Illinois. The results were pretty much the same. First up, Colorado.

A federal court has thrown out a 2010 Colorado law, which had already been temporarily blocked in federal court last year, meant to spur online retailers like Amazon to collect state sales tax. ‘I conclude that the veil provided by the words of the act and the regulations is too thin to support the conclusion that the act and the regulations regulate in-state and out-of-state retailers even-handedly,’ U.S. District Judge Robert Blackburn wrote in his opinion. The law and the rules to carry it out ‘impose an undue burden on interstate commerce’ and are unconstitutional, the judge wrote.

The story played out pretty much the same way in Illinois.

A Cook County Circuit judge ruled against the state of Illinois in its attempt to tax online sales from out-of-state companies.

Judge Robert Lopez Cepero today ruled that the 2011 law doesn’t pass muster because simply having an affiliated company in the state that makes sales or refers customers to an online retailer doesn’t create enough of a presence, or nexus, for tax purposes.

He also ruled that the Illinois law is unenforceable because of a federal Internet tax moratorium that runs through 2014.

So where do we go from here? If there is no constitutional path to allowing the individual states to collect sales tax, then it would seem that only two possible solutions remain. First, we could simply never have taxes on interstate sales. This is obviously a very popular answer, since nobody likes paying taxes and we all enjoy getting a good deal shopping over the internet. But the states are seeking ways to address a couple of very real problems. They need the revenue in many cases, but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

Is a federal solution like the Marketplace Fairness Act the answer? It’s going to be a hard sell convincing conservatives that “more taxes” is ever the answer to anything, even if the money is supposed to be channeled to the states. But this situation needs to be settled sooner or later.


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Tax increase loses in Illinois? There IS hope!

VegasRick on April 29, 2012 at 12:34 PM

Heh! Bob McDonnell just said EPA stands for the Employment Prevention Agency

beedubya on April 29, 2012 at 12:34 PM

There was an article in the Dallas Morning News “Briefing” yesterday about how Amazon.com has agreed to collect sales tax in Texas while simultaneously investing $200 million in creating 2500 jobs in Texas. This after they closed their Irving, TX distribution center in protest over the state’s pressure to collect taxes. As a Texan, I liked saving the money, but with no income tax here, sales tax is a big deal.

tommytom02 on April 29, 2012 at 12:37 PM

Yeah, sure Jazz. Let’s expect the federal government to raise taxes in an election year. Freaking BRILLIANT.

As a constitutionalist, I don’t think imposing a national standardized fair tax would be unconstitutional. In fact, I think it’s just the sort of thing the founders had in mind when they gave the federal government the power to “regulate” (that is, make regular) interstate commerce.

As a conservative, I think it’s an awful idea. Yeah, I know. It’s different when it’s your own ox being gored, but I think it makes more sense from a strictly practical point of view to find other ways to encourage people to shop locally instead of online. Either that, or states that have sales taxes should find other ways to raise revenue.

gryphon202 on April 29, 2012 at 12:38 PM

I used to oppose sales tax on internet purchases. Two thoughts changed my mind.

1) It isn’t fair that physical locations have to charge a sales tax. For all the chest-thumping about “the future” and “old models,” Amazon’s success is built on a 6% or 7% government-enforced advantage over local businesses.

2) The internet is a loophole. As we see in every other field, the surest way to raise public awareness about tax rates is to close loopholes, and the surest way to make sure that taxes remain high is to keep the loopholes open.

HitNRun on April 29, 2012 at 12:39 PM

As a Texan, I liked saving the money, but with no income tax here, sales tax is a big deal.

tommytom02 on April 29, 2012 at 12:37 PM

Then Texans should think long and hard about what constitutes pro-business or anti-business policies. Incidentally, does Texas have a state property tax?

gryphon202 on April 29, 2012 at 12:40 PM

They need the revenue in many cases, but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

Even with sales taxes on internet sales, brick & mortar will be fighting a losing battle.

Record stores, book stores, flower stores and hobby shops were just the first to succumb. Wallpaper, blinds, hard to find auto-parts and even fabric are getting hit now.

Seeds, gourmet food items and tools won’t be far behind.

Its getting too difficult for a small inventory place to keep up.

cozmo on April 29, 2012 at 12:40 PM

I used to oppose sales tax on internet purchases. Two thoughts changed my mind.

Really? It sounds to me like you didn’t put much thought into it at all.

1) It isn’t fair that physical locations have to charge a sales tax. For all the chest-thumping about “the future” and “old models,” Amazon’s success is built on a 6% or 7% government-enforced advantage over local businesses.

So is the burden on Amazon to change that by becoming a state-enforced tax collector? Or on the states who have to deal with what consumers see as a better alternative to shopping locally? Libtards whine about fariness. Makes me said to see so-called “conservatives” going down the same path.

2) The internet is a loophole. As we see in every other field, the surest way to raise public awareness about tax rates is to close loopholes, and the surest way to make sure that taxes remain high is to keep the loopholes open.

HitNRun on April 29, 2012 at 12:39 PM

Again, since when did conservatives complain about “loopholes?” I thought that “exploiting loopholes” to avoid paying taxes at the federal level was a perfectly legal and acceptable thing to do. How come the fact that it’s state-level sales tax suddenly changes all the old conservative dogma?

gryphon202 on April 29, 2012 at 12:42 PM

does Texas have a state property tax?

We have a city, county, school tax. Not a state property tax. We also have homestead and that makes a huge difference in taxes if you file your home for the homestead dedution.
L

letget on April 29, 2012 at 12:44 PM

This is the wrong approach. Amazon and eBay should levy a finders fee for finding customers equal to the state sales tax rate in those states. They can then give a discount to these GOOD customers.

It is illegal to charge a penalty for not paying rent on time in some states. The solution is to charge the penalty on top of the rent and give a discount. Problem solved. The rent comes in on time.

Stefan.

stefanslaw on April 29, 2012 at 12:44 PM

Just get rid of the sales taxes already. They are way more trouble than they are worth.

Count to 10 on April 29, 2012 at 12:45 PM

Just get rid of the sales taxes already. They are way more trouble than they are worth.

Count to 10 on April 29, 2012 at 12:45 PM

You can travel to all of the states that have them then, and just TRY to convince their respective legislators. Good luck.

gryphon202 on April 29, 2012 at 12:46 PM

The answer is right in front of you, Jazz. Let the STATES settle it. If the laws they pass aren’t constitutional, then try until they are.

gitarfan on April 29, 2012 at 12:46 PM

@12:44 s/b deduction.
I might add those here in TX over 65 can file to have your school taxes frozen, but you have to ask for it, they don’t just give it to you. Do that where you send you taxes in.
L

letget on April 29, 2012 at 12:47 PM

Just get rid of the sales taxes already. They are way more trouble than they are worth.

Count to 10 on April 29, 2012 at 12:45 PM

Not in states without property taxes or income taxes.

It is the flattest, fairest tax there is.

It also puts the state government on a leash that states with income, or property taxes don’t have.

Everybody, pays the sales tax. That way everybody knows when congress critters try to raise it.

cozmo on April 29, 2012 at 12:49 PM

Then Texans should think long and hard about what constitutes pro-business or anti-business policies. Incidentally, does Texas have a state property tax?

gryphon202 on April 29, 2012 at 12:40 PM

Property tax in Texas has been a big issue over the years, especially since the court-mandated school equalization laws, which means property-rich school district sent money to the state which is then given to property-poor district. A lawsuit over the current law filed by the richer district is currently pending, though with the price of oil up, ad valorem mineral valuations and taxes should be up quite a bit this year, based on knocking out the 2009 numbers used in the three-year rolling average to calculate oil and natural gas mineral valuations.

(Sales tax in Texas, meanwhile, is 6 1/4 percent base, with an up to 2 percent local option for cities, counties and/or special purpose districts like hospitals. So most areas are paying 8 1/4 percent, which has remained unchanged for about two decades.)

jon1979 on April 29, 2012 at 12:49 PM

It’s good news. The biggest problem with taxes (IMO) – old taxes, new taxes, etc… is that it will never be enough. Our current federal government will never be able to collect enough taxes to satisfy it’s insane spending. Never. Tax revenue could magically increase by a factor of 10 and spending will increase by a factor of 15.

Many state and local governments are the same exact way.

I’m not concerned with what is fair any longer.

The politicians will do their campaigning, trying to say “Group X has an unfair advantage, they need to be taxed more out of fairness.”

“Group Y isn’t paying their fair share, blah, blah, blah.”

When my state constantly raises tax rates, and then constantly throws more money away in the form of vote-buying handouts, I will to everything in my power to avoid those taxes.

reaganaut on April 29, 2012 at 12:50 PM

Really? It sounds to me like you didn’t put much thought into it at all.

Troll harder.

So is the burden on Amazon to change that by becoming a state-enforced tax collector?

No, the burden is on the government to make sure that they aren’t picking winners. If you want to trot out the “this should be grounds to abolish taxes, not collect it from Amazon” line, go ahead, but even in a libertarian utopia there would likely still be some sales tax, and it would be an unfair advantage for internet retailers not to have to collect it.

Libtards whine about fariness. Makes me said to see so-called “conservatives” going down the same path.

Liberals whine about fairness of economic outcomes. Conservatives, “so-called” and otherwise, worry about unfair government distortion of the market.

I thought that “exploiting loopholes” to avoid paying taxes at the federal level was a perfectly legal and acceptable thing to do.

Uh, yeah. It is. That’s why good tax government is synonymous with closing them. Do I come off as demonizing Amazon somehow? It’s not Amazon’s fault, but that doesn’t mean we should leave the loophole open.

Admit it: you’re just whining because you don’t want to pay sales tax on Amazon. That’s perfectly justifiable, but dressing it up as a political philosophy is pretty shallow. Ev

HitNRun on April 29, 2012 at 12:50 PM

(Sales tax in Texas, meanwhile, is 6 1/4 percent base, with an up to 2 percent local option for cities, counties and/or special purpose districts like hospitals. So most areas are paying 8 1/4 percent, which has remained unchanged for about two decades.)

jon1979 on April 29, 2012 at 12:49 PM

Hmm. Here in South Dakota, state sales tax is 4%, with anywhere from 1% to 3% for local jurisdictions, for a combined sales tax of 5%-7%. The only change I’ve ever seen in my life was here at the city level, and as far as I know, there hasn’t been any grumbling here about sales tax on internet purchases. Most of the sales tax money we raise here comes from food and clothing purchases which has been its own political football over the last several years.

gryphon202 on April 29, 2012 at 12:52 PM

This subject is really complicated and I think a link to a primer should be included whenever posted about. There are always some misconceptions and assumptions that pop up in these conversations. For instance, the Internet tax exemption does not exempt taxes on all Internet sales, only ones that cross state lines. For ones that originate and ship within the same state are regulated by each state and more often then not subject to sales tax. Even very small sellers on eBay and amazon collect sales tax to sales within their own state and are only exempt from sales tax for sales that ship outside their state. For years Amazon tried to avoid collecting sales taxes by saying that their warehouses were held in a different subsidiary company but the states were rightly upset that any other company with a warehouse presense in their state was collecting sales tax but amazon was not, keep in mind, only on sales in that state. Amazon is a tricky case because they have warehouses in so many states and when you order something who knows which warehouse it comes from. But that is how all these lawsuits started. Amazon was really using their size and force to try to circumvent situations other small retailers could not. I agree it should be handled between the states and retails from small to big like amazon.

rose-of-sharon on April 29, 2012 at 12:52 PM

They need the revenue in many cases, but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

Wrong. It’s not “uneven”. The only difference is being the middle man in a tax scheme. Brick and mortar stores also have quite a few advantages over their online competition.

So, let’s not turn this into a fairness or competitive disadvantage issue, because it’s not. Every single brick and mortar store has the capability to create an online presence if they want to compete on that level.

This problem has existed well before the internet was around.

Mail order companies have been dealing with this for generations. This is nothing new. The only difference is the governments are seeing the number of interstate sales go up due to technology and want to get their greedy paws on the cash.

ButterflyDragon on April 29, 2012 at 12:54 PM

US Constitution Section 9 Clause 5

No Tax or Duty shall be laid on Articles exported from any State.

The Rock on April 29, 2012 at 12:55 PM

jon1979 on April 29, 2012 at 12:49 PM

I dislike it when people leave out DART.

cozmo on April 29, 2012 at 12:55 PM

Admit it: you’re just whining because you don’t want to pay sales tax on Amazon. That’s perfectly justifiable, but dressing it up as a political philosophy is pretty shallow. Ev

HitNRun on April 29, 2012 at 12:50 PM

Buddy, I DON’T pay sales tax on Amazon. You’re whining because you think we all should. In the process, you come off as making arguments I usually hear from liberals.

If you don’t want to be accused of sounding like a liberal, don’t make liberal arguments. It’s not about “fairness” and it’s not about “loopholes.” It’s about states’ legitimate, though misguided, concerns that internet businesses will make it impossible for them to raise tax revenue necessary for them to function. They will not solve the problem by forcing businesses out of their states in favor of greener pastures, though that seems to be exactly what you and Jazz are in favor of.

gryphon202 on April 29, 2012 at 12:56 PM

So where do we go from here?

I know this is really radical and all, but …

Stop Spending

faraway on April 29, 2012 at 12:56 PM

I don’t see a good solution, or even a bad one yet.

HOWEVER, could deliveries be taxed?

Not on a value basis but simply on a per-delivery basis? The service is being rendered at a specific address, and the delivery company (post office, UPS, FedEx) would have to collect the tax from the sender, who would simply charge the consumer. The tax would never touch federal pockets but would be paid to the state.

Ultimately states can’t afford to lose a chunk of sales taxes for items that traditionally were bought and taxed locally. The alternative is to increase taxes on things that cannot be purchased by mail order in a practical fashion, but those things are food, fuel and other daily needs. This obviously screws the poor something fierce. So, the states are left to either increase income taxes and possibly various taxes on property.

Even if a national sales tax were imposed (please, no constitutional debate for now), the money would be stolen by Congress for federal pork projects. Or worse, majority parties in Congress and the White House would spread the dollars to benefit some states, and top punish others.

As to saving ‘mom and pop’ brick and mortar stores,the hell with them. Sorry, but as a tax-payer I am no more concerned with propping up little book shops (as much as I loved them) than I am family farms.

doufree on April 29, 2012 at 12:57 PM

I try to shop locally but you can’t always find what you want/need without a 100 mile round trip to Atlanta. With all the “educated elites” you would think they could find a common sense answer. Crap, did I say common sense?

marinetbryant on April 29, 2012 at 12:58 PM

Tax increase loses in Illinois? There IS hope!

VegasRick on April 29, 2012 at 12:34 PM

The People’s Republic of Illinois already has a “voluntary” internet sales tax written into their tax code. So, there’s that.

visions on April 29, 2012 at 12:59 PM

Most of the sales tax money we raise here comes from food and clothing purchases which has been its own political football over the last several years.

gryphon202 on April 29, 2012 at 12:52 PM

Y’all tax food? In a farming state?

Texas has a sales tax holiday every year in August that is turning into a second Christmas for retailers.

Been many places around the country, except for our (DISD and Parkland) local property tax, I prefer the Texas way.

cozmo on April 29, 2012 at 12:59 PM

They need the revenue in many cases, but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field

Good Lord, Jazz!

Revenue? Seriously? What exactly are they creating to generate revenue?

The second issue is a legit problem, but don’t use the bs second-definition of revenue to justify overspending by a state.

budfox on April 29, 2012 at 1:00 PM

As a believer in the federal system and states’ rights, I think this is a state matter; other than providing a convenient cover and
“smoothing” mechanism for businesses the feds have no role in state taxation matters.

clippermiami on April 29, 2012 at 1:01 PM

Most of the sales tax money we raise here comes from food and clothing purchases which has been its own political football over the last several years.

gryphon202 on April 29, 2012 at 12:52 PM

Y’all tax food? In a farming state?

Texas has a sales tax holiday every year in August that is turning into a second Christmas for retailers.

Been many places around the country, except for our (DISD and Parkland) local property tax, I prefer the Texas way.

cozmo on April 29, 2012 at 12:59 PM

We tax food because we have no state income tax and we have the lowest property tax percentage among states that have property taxes. Like Texas apparently does, most property tax money goes to schools here, so that leaves sales tax as the only real source of revenue for day-to-day government operation. Personally, I find the idea of taxing farmers on their property far more offensive than I find sales tax on food, but maybe that’s just me.

gryphon202 on April 29, 2012 at 1:02 PM

The answer is simple: repeal the 16th Amendment and replace it with a nation-wide sales tax i.e. the FAIR tax.

devan95 on April 29, 2012 at 1:03 PM

Example company sells products as follows:
- headquarted in NY
- sales office in MA
- shipped from warehouse in DE to warehouse in CT
- then shipped to third party distribution center in NE
- then shipped to buyer’s Mom as a gift to WA
- company incorporated in NV
- closest store is in OR
- buyer shipping address is in HI
- buyer billing address is his company credit card in CA
- buyer actually ordered the product from his mobile while on a vacation in China

Who taxes this sale?

faraway on April 29, 2012 at 1:04 PM

Buddy, I DON’T pay sales tax on Amazon. You’re whining because you think we all should.

Not at all. If your state has no sales tax, then I don’t believe you should pay tax on the Internet. That would be unfair to you and unfair to Amazon (etc). I can’t tell if that’s what Jazz means or not, but I didn’t think it was.

HitNRun on April 29, 2012 at 1:05 PM

The answer is simple: repeal the 16th Amendment and replace it with a nation-wide sales tax i.e. the FAIR tax.

devan95 on April 29, 2012 at 1:03 PM

The FAIR tax addresses federal taxation, not state taxation. Try again.

gryphon202 on April 29, 2012 at 1:05 PM

This is damning:

Judge Robert Lopez Cepero today ruled that the 2011 law doesn’t pass muster because simply having an affiliated company in the state that makes sales or refers customers to an online retailer doesn’t create enough of a presence, or nexus, for tax purposes.

Most all states regard at the merest, a nexus exists in a foreign state if you have an individual – like a sales agent – collecting sales orders for the company. If the sales agent refers the buyer to the company and steps away from receiving the sales/purchase order, no nexus is established. Now, this judge is stepping way beyond that.

Everything online should be taxed at the rate that the consignee’s state charges. Sales tax is important to the local communities in the states that impose sales tax – not at all an issue in states that do not have sales tax. Local vendors, regardless if they are still blacksmiths, are price disadvantaged.

ericdijon on April 29, 2012 at 1:06 PM

Not at all. If your state has no sales tax, then I don’t believe you should pay tax on the Internet. That would be unfair to you and unfair to Amazon (etc). I can’t tell if that’s what Jazz means or not, but I didn’t think it was.

HitNRun on April 29, 2012 at 1:05 PM

It’s not an issue in my state, and thank God for that. But sales tax, by its very definition, makes tax collectors out of businesses. So…

Example company sells products as follows:
- headquarted in NY
- sales office in MA
- shipped from warehouse in DE to warehouse in CT
- then shipped to third party distribution center in NE
- then shipped to buyer’s Mom as a gift to WA
- company incorporated in NV
- closest store is in OR
- buyer shipping address is in HI
- buyer billing address is his company credit card in CA
- buyer actually ordered the product from his mobile while on a vacation in China

Who taxes this sale?

faraway on April 29, 2012 at 1:04 PM

How would you deal with a situation like this?

gryphon202 on April 29, 2012 at 1:07 PM

To comment on my own comment …

I don’t see a good solution, or even a bad one yet.

HOWEVER, could deliveries be taxed?

It’s important to do it on a per-delivery rather than a value basis, because the latter is a tax. A per-delivery basis is viewed by the courts as a fee, the same way vehicles are sometimes taxed for what they carry across state lines in road use taxes. Cargo ships also are charged such fees based on use or weight rather than on the value of the cargo for the use of ports controlled by states (there was a Supreme Court ruling on this sometime in the last 10 years, but I couldn’t find it–petitioners included fertilizer importers I think!)
.

doufree on April 29, 2012 at 1:09 PM

Everything online should be taxed at the rate that the consignee’s state charges. Sales tax is important to the local communities in the states that impose sales tax – not at all an issue in states that do not have sales tax. Local vendors, regardless if they are still blacksmiths, are price disadvantaged.

ericdijon on April 29, 2012 at 1:06 PM

So if I buy it as a customer here in South Dakota, I should have to pay South Dakota sales taxes. What if I order something while I’m in Minnesota and have it shipped to a Nebraska shipping address?

gryphon202 on April 29, 2012 at 1:09 PM

I use amazon quite a bit. Having said this it seems to me this gives internet providers an unfair advantage over brick and morter businesses. the sales tax should be paid to the state in which the buyer resides.

if it’s shipped to MA in my case I should be paying the MA sales tax.

It’s a business competitive issue in my opinion

gerrym51 on April 29, 2012 at 1:11 PM

I use amazon quite a bit. Having said this it seems to me this gives internet providers an unfair advantage over brick and morter businesses. the sales tax should be paid to the state in which the buyer resides.

if it’s shipped to MA in my case I should be paying the MA sales tax.

It’s a business competitive issue in my opinion

gerrym51 on April 29, 2012 at 1:11 PM

So what if you’re on vacation and you have it shipped to New Jersey instead? Pay the NJ sales taxes? Or what if you’re on vacation in New Jersey and you end up having it shipped to New York?

gryphon202 on April 29, 2012 at 1:12 PM

Sears, and many others, ran a catalog service w/o state sales taxes for more than 100 years.

We do not need new intrastate sales taxes. This is all a scam by inefficient governments looking for cash to cover decades of failed government management.

Freddy on April 29, 2012 at 1:12 PM

It’s honestly not going to keep me up at night if retailers at Brick & Mortar stores have this disadvantage.

Retail is dying anyway, and maybe they’ll fight harder next time the state tries to raise sales taxes instead of just putting all their efforts into taxing online businesses.

My state sales tax is just under 10%, and you’d be amazed how many local businesses actually support RAISING these taxes every time the issue comes up.

I love watching Atlas shrug.

BradTank on April 29, 2012 at 1:12 PM

We tax food because we have no state income tax and we have the lowest property tax percentage among states that have property taxes.

gryphon202 on April 29, 2012 at 1:02 PM

Then I fail to see what you are complaining about.

What if I order something while I’m in Minnesota and have it shipped to a Nebraska shipping address?

gryphon202 on April 29, 2012 at 1:09 PM

Then you would be Timmothy Geitner.

cozmo on April 29, 2012 at 1:13 PM

Example company sells products as follows:
- headquarted in NY
- sales office in MA
- shipped from warehouse in DE to warehouse in CT
- then shipped to third party distribution center in NE
- then shipped to buyer’s Mom as a gift to WA
- company incorporated in NV
- closest store is in OR
- buyer shipping address is in HI
- buyer billing address is his company credit card in CA
- buyer actually ordered the product from his mobile while on a vacation in China

Who taxes this sale?

faraway on April 29, 2012 at 1:04 PM

Of course this situation is common and happens all the time. The company must submit to all sales tax laws where they have a physical presense. Most often this means collecting sales taxes on sales that ship to customers in those states and remitting to the state if they require companies with a nexus or physical presense to do so.

rose-of-sharon on April 29, 2012 at 1:13 PM

It’s honestly not going to keep me up at night if retailers at Brick & Mortar stores have this disadvantage.

Retail is dying anyway, and maybe they’ll fight harder next time the state tries to raise sales taxes instead of just putting all their efforts into taxing online businesses.

My state sales tax is just under 10%, and you’d be amazed how many local businesses actually support RAISING these taxes every time the issue comes up.

I love watching Atlas shrug.

BradTank on April 29, 2012 at 1:12 PM

The way to keep a full-scale trade war from breaking out among the states is to make whatever solution is proposed, a FEDERAL one. That is why the commerce clause really exists, people. Now step back and ask yourselves, is this an issue you really trust the federal government to handle?

gryphon202 on April 29, 2012 at 1:14 PM

Then I fail to see what you are complaining about.

cozmo on April 29, 2012 at 1:13 PM

What I’m complaining about is the number of self-professing “conservatives” here that sound like libtards, and the fear that the federal government may be called in to settle this, ergo effing it up even further and making it an issue in states like mine where it is currently not.

gryphon202 on April 29, 2012 at 1:16 PM

rose-of-sharon on April 29, 2012 at 1:13 PM

So, who taxes the sale?

faraway on April 29, 2012 at 1:18 PM

The way to keep a full-scale trade war from breaking out among the states is to make whatever solution is proposed, a FEDERAL one. That is why the commerce clause really exists, people. Now step back and ask yourselves, is this an issue you really trust the federal government to handle?

gryphon202 on April 29, 2012 at 1:14 PM

What? That war has been going on longer than you, or I, have been around.

Retail has been dying for generations. High rent moved stores away from downtowns into the suburban malls. Then to outlet stores even farther away. The Wal-Mart types killed off the small town retailers and mail-order has always eaten into the brick & mortars. The internet only made it more efficient.

cozmo on April 29, 2012 at 1:19 PM

Not in states without property taxes or income taxes.

It is the flattest, fairest tax there is.

It also puts the state government on a leash that states with income, or property taxes don’t have.

Everybody, pays the sales tax. That way everybody knows when congress critters try to raise it.

cozmo on April 29, 2012 at 12:49 PM

It is the easiest tax to cheat, adds a huge overhead for retail, screws around with purchasing decisions, and leads to all kinds of corruption in terms of items that are exempt or taxed extra. Not to mention that punishes item purchases relative to labor purchases.

Count to 10 on April 29, 2012 at 1:19 PM

So, who taxes the sale?

faraway on April 29, 2012 at 1:18 PM

My prediction: We will get several hundred comments on this thread, and no one will answer your question.

gryphon202 on April 29, 2012 at 1:19 PM

gryphon202 on April 29, 2012 at 1:16 PM

The only one I recall writing about federal involvement here is you.

cozmo on April 29, 2012 at 1:21 PM

rose-of-sharon on April 29, 2012 at 1:13 PM

So, who taxes the sale?

faraway on April 29, 2012 at 1:18 PM

The seller who has the sellers permit and ends up with the money in their pocket is ultimately responsible to the state for the tax. On Amazon and eBay, for instance, you can sign up for their services to collect sales taxes that ship to certain states, choosing the ones you want and not the ones you don’t, but if they mess up and miss anything, it is the sellers responsibility to catch that and pay for it out of their pocket to the state.

rose-of-sharon on April 29, 2012 at 1:21 PM

In my above comment when I talk about sellers on Amazon, I am talking about third party sellers, not Amazon as a seller itself. I might have mentioned this topic is very complicated and I have just a basic understanding from selling myself on these two venues and researching my responsibilities as a seller and follow the topic for that reason.

rose-of-sharon on April 29, 2012 at 1:23 PM

gryphon202 on April 29, 2012 at 1:09 PM

It is the ultimate destination that matters and the essence of the simplicity of the suggestion. You could be on the moon, but if it ships to a state that collects sales tax, that state is living off of it and expects it.

ericdijon on April 29, 2012 at 1:23 PM

So, who taxes the sale?

faraway on April 29, 2012 at 1:18 PM

Clearly you didn’t understand the person’s answer or you were not satisfied with the answer.

It is not a simple matter of saying one state or location pays the tax and all others are off the hook.

Many of the items you purchase in a brick and mortar store have hidden taxes on them as well. No one is crying about that. (Most people aren’t aware of them)

Mail order businesses have been doing this for generations. This is not a new “problem”. The only thing new about this is the desire for the states to figure out a way to get more of the consumers hard earned cash.

The answer to government wanting more of our money is always the same: NO!

ButterflyDragon on April 29, 2012 at 1:23 PM

It is the easiest tax to cheat, adds a huge overhead for retail, screws around with purchasing decisions, and leads to all kinds of corruption in terms of items that are exempt or taxed extra. Not to mention that punishes item purchases relative to labor purchases.

Count to 10 on April 29, 2012 at 1:19 PM

Um no, unless it gets too high

again no, especially with computerization

I’ll give you the third one, only because smart people always look for the better deal

No, and dumb

Not applicable, and dumb

cozmo on April 29, 2012 at 1:24 PM

So, who taxes the sale?

faraway on April 29, 2012 at 1:18 PM

My prediction: We will get several hundred comments on this thread, and no one will answer your question.

gryphon202 on April 29, 2012 at 1:19 PM

And yet I did two posts later. :)

rose-of-sharon on April 29, 2012 at 1:25 PM

So, who taxes the sale?

I’m assuming you mean the taxing mechanism. If the buyer is in say texas-the internet seller collects texas sales tax and transmits to texas-just like a store does in a state.

gerrym51 on April 29, 2012 at 1:25 PM

What? That war has been going on longer than you, or I, have been around.

Retail has been dying for generations. High rent moved stores away from downtowns into the suburban malls. Then to outlet stores even farther away. The Wal-Mart types killed off the small town retailers and mail-order has always eaten into the brick & mortars. The internet only made it more efficient.

cozmo on April 29, 2012 at 1:19 PM

Now Wal-mart is the villain? Really? Libtards abound…

Retail isn’t dying. In any event, that’s not what you’re arguing. You’re arguing that there is something sacrosanct about brick-and-mortar retail as opposed to ordering something through a retail outlet via catalog or the internet, or from Wal-mart for that matter.

In case you haven’t noticed, I’d grudgingly accept a federal effort to regulate (make regular) this issue as constitutional, but my mistrust of those stumble-bum jerks in DC is rather reflexive. States can figure out on their own that if they demand more, they will end up with less. It’s virtually an immutable natural law of tax policy.

gryphon202 on April 29, 2012 at 1:26 PM

And yet I did two posts later. :)

rose-of-sharon on April 29, 2012 at 1:25 PM

No you didn’t. Try again.

gryphon202 on April 29, 2012 at 1:26 PM

Just think how many BILLIONS of dollars that has been steered away from public sector unions as a result of online retail sales.

BradTank on April 29, 2012 at 1:26 PM

I might have mentioned this topic is very complicated and I have just a basic understanding from selling myself on these two venues and researching my responsibilities as a seller and follow the topic for that reason.

rose-of-sharon on April 29, 2012 at 1:23 PM

And taxing internet sales will only complicate things further.

cozmo on April 29, 2012 at 1:27 PM

gryphon202 on April 29, 2012 at 1:12 PM

If you have the energy to do so, you can today buy something in NY and show a residence in a different state and not pay the local taxes. You will have to pay your local taxes. This is common along towns with close state borders when buying appliances and automobiles and other bigger ticket items. With autos, you get nailed when you register them.

ericdijon on April 29, 2012 at 1:27 PM

I’m assuming you mean the taxing mechanism. If the buyer is in say texas-the internet seller collects texas sales tax and transmits to texas-just like a store does in a state.

gerrym51 on April 29, 2012 at 1:25 PM

If the buyer is in Texas? Or his residency is in Texas? You’re not answering the question here. I can be a resident of one state, be vacationing in another, and have a package sent to a third — all at the same time. So does my state of residency have taxing authority? Or the state where I am ordering from? Or the state where the business I order from has a presence? Or the state where I’m sending to? If it is the state I am ordering from, what about if I am out of the country? What if I am ordering from a business who does not have a presence inside the country? This can get awfully complicated awfully fast, and all I’m seeing is pat answers that don’t really answer the question proffered.

gryphon202 on April 29, 2012 at 1:28 PM

And yet I did two posts later. :)

rose-of-sharon on April 29, 2012 at 1:25 PM

No you didn’t. Try again.

gryphon202 on April 29, 2012 at 1:26 PM

Um, yes, I did, as now others have too. There are many mechanisms for how the tax can actually collecting, I could go through the technical details of that, but the answer to the precise question that was being asked, is that how it currently works is that a seller with a physical presence in a state is the responsible party for remitting sales taxes for any sales that were shipped to an address within that state. Any other questions?

rose-of-sharon on April 29, 2012 at 1:29 PM

If the buyer is in Texas? Or his residency is in Texas? You’re not answering the question here. I can be a resident of one state, be vacationing in another, and have a package sent to a third — all at the same time. So does my state of residency have taxing authority? Or the state where I am ordering from? Or the state where the business I order from has a presence? Or the state where I’m sending to? If it is the state I am ordering from, what about if I am out of the country? What if I am ordering from a business who does not have a presence inside the country? This can get awfully complicated awfully fast, and all I’m seeing is pat answers that don’t really answer the question proffered.

gryphon202 on April 29, 2012 at 1:28 PM

The address the purchase is shipped to is the address that matters.

rose-of-sharon on April 29, 2012 at 1:31 PM

gryphon202 on April 29, 2012 at 1:26 PM

You do realize states compete with each other right? They try to draw business into their state by doing things such as eliminating state sales taxes, tax breaks, etc.

They want their state to be attractive to business so it will employ the people that live there.

Due to that competition, states need to re-think their tax scheme to attract those businesses.

Not sure why anyone is taking the presumptive opinion that there MUST be a tax of some kind on any sale, whether it be online, mail order or in a physical presence.

Allow the states to compete.

ButterflyDragon on April 29, 2012 at 1:31 PM

If you have the energy to do so, you can today buy something in NY and show a residence in a different state and not pay the local taxes. You will have to pay your local taxes. This is common along towns with close state borders when buying appliances and automobiles and other bigger ticket items. With autos, you get nailed when you register them.

ericdijon on April 29, 2012 at 1:27 PM

New York’s taxation laws are onerous, and I’m not even talking about the rates. You couldn’t pay me enough to live anywhere in that hellacious wallet vacuum. What I’d like to know is, in the name of “fairness,” are we going to force the rest of America to become like New York and California?

gryphon202 on April 29, 2012 at 1:31 PM

Now Wal-mart is the villain? Really? Libtards abound…

gryphon202 on April 29, 2012 at 1:26 PM

No and for you to imply it is disingenuous at the least.

Retail isn’t dying. In any event, that’s not what you’re arguing. You’re arguing that there is something sacrosanct about brick-and-mortar retail as opposed to ordering something through a retail outlet via catalog or the internet, or from Wal-mart for that matter.

gryphon202 on April 29, 2012 at 1:26 PM

No I didn’t. The market evolves. Retailers must evolve as well.

In case you haven’t noticed, I’d grudgingly accept a federal effort to regulate (make regular) this issue as constitutional, but my mistrust of those stumble-bum jerks in DC is rather reflexive. States can figure out on their own that if they demand more, they will end up with less. It’s virtually an immutable natural law of tax policy.

gryphon202 on April 29, 2012 at 1:26 PM

That’s the lefty big government view.

cozmo on April 29, 2012 at 1:31 PM

I try as much as I can to purchase on Amazon. As a Californian, anything I can do to starve the Sacramento BEAST is well worth the effort.

kurtzz3 on April 29, 2012 at 1:32 PM

gryphon202 on April 29, 2012 at 1:26 PM

You do realize states compete with each other right? They try to draw business into their state by doing things such as eliminating state sales taxes, tax breaks, etc.

They want their state to be attractive to business so it will employ the people that live there.

Due to that competition, states need to re-think their tax scheme to attract those businesses.

Not sure why anyone is taking the presumptive opinion that there MUST be a tax of some kind on any sale, whether it be online, mail order or in a physical presence.

Allow the states to compete.

ButterflyDragon on April 29, 2012 at 1:31 PM

That is exactly what I am proposing. I think the states should be allowed to compete, hence my reflexive distrust of federal-level solutions, constitutionality notwithstanding.

gryphon202 on April 29, 2012 at 1:32 PM

Quite frankly I would like to see the entire federal income tax system scrapped and we adopt a national sales tax system instead. Perhaps the system could be designed to kick back a certain percentage of the tax back to the states (no strings attached to prevent federal abuse of the system) to do with as they please. If any state decides they need more revenue they can tax property, income and sales within their own state. To make it work and stick we would probably need a constitutional amendment though.

NotCoach on April 29, 2012 at 1:33 PM

That’s the lefty big government view.

cozmo on April 29, 2012 at 1:31 PM

The lefty big government view is that the federal government has the constitutional power to regulate interstate commerce, even though I’m hoping we don’t depend on them to exercise it? That’s a lefty big government view? Really? REALLY?!

/facepalm

gryphon202 on April 29, 2012 at 1:34 PM

And taxing internet sales will only complicate things further.

cozmo on April 29, 2012 at 1:27 PM

Well, I’m sure a overall federal system *might* be easier than a state-by-state system like now, but I’m sure it would end up being more burdensome, so I’d rather see it stay with the states.

Interestingly, that is the reason why Amazon is now advocating for a one-size-fit-all federal system for internet sales tax, because they have so many warehouses in so many states and the states are not letting them off the hook anymore by saying their warehouses are owned by a different subsidary company. eBay, on the other hand, has more smaller seller that are located in just one state and prefer to avoid a federal sales tax.

rose-of-sharon on April 29, 2012 at 1:34 PM

Quite frankly I would like to see the entire federal income tax system scrapped and we adopt a national sales tax system instead. Perhaps the system could be designed to kick back a certain percentage of the tax back to the states (no strings attached to prevent federal abuse of the system) to do with as they please. If any state decides they need more revenue they can tax property, income and sales within their own state. To make it work and stick we would probably need a constitutional amendment though.

NotCoach on April 29, 2012 at 1:33 PM

What does that have to do with state-level sales taxes?

gryphon202 on April 29, 2012 at 1:34 PM

Amazon isn’t “winning”, today, because of the sales tax issue. I live in Seattle, and therefore we must pay sales tax on Amazon purchases… I still buy almost everything from Amazon. Amazon provides a vastly superior service and shopping experience, and that is why they win. This Forbes article/rant gives a very good overview of what I mean.

Companies like BestBuy also have an “unfair advantage” over online retailers, and they choose to exploit and mistreat customers rather than exploit their natural advantage… that “unfair advantage” is the combination of a) the ability to provide a sales person with expertise on demand, face-to-face, b) an easy, reliable way to return items in person or get service on purchases, and c) the ability to touch, feel, and see a product before buying.

I don’t see the sales-tax issue as an “unfair” advantage to amazon. Sometimes it is (if a customer is only concerned with price), but sometimes it is actually more of a playing-field leveler in my opinion. This issue isn’t really about fairness or unfairness. It is, at the end of the day, about taxes and nothing more.

DaveS on April 29, 2012 at 1:35 PM

Brick and mortar stores consume local resources not used by out of state retailers such as electricity, water, fire and police services, regulatory (building inspectors), etc. Comparing Internet retailers to brick and mortar is comparing apples and oranges.

-burn8

burn8 on April 29, 2012 at 1:35 PM

I try as much as I can to purchase on Amazon. As a Californian, anything I can do to starve the Sacramento BEAST is well worth the effort.

kurtzz3 on April 29, 2012 at 1:32 PM

This is why you will never, ever see Amazon even trying to build a warehouse or any facility in California! It’s the last place they want a physical presence. They can ship to their Prime customers pretty fast from Nevada…

rose-of-sharon on April 29, 2012 at 1:36 PM

I guess no one has considered the cost to a small business that sells products online. Who wants to be an unpaid tax collector for 49 other states?

My state has a gross receipts tax so I’m already charging each and every customer, regardless of where they live. As a resident of New Mexico, what do I owe the state of New Jersey, Illinois, Alabama, etc… ?

Most states already have laws on the books regarding taxes owed on internet sales. Instead of forcing me to do their dirty work, perhaps they should expend their own money to go after their residents if they’re not paying taxes owed.

Wendya on April 29, 2012 at 1:36 PM

I don’t see the sales-tax issue as an “unfair” advantage to amazon. Sometimes it is (if a customer is only concerned with price), but sometimes it is actually more of a playing-field leveler in my opinion. This issue isn’t really about fairness or unfairness. It is, at the end of the day, about taxes and nothing more.

DaveS on April 29, 2012 at 1:35 PM

Ditto that.

gryphon202 on April 29, 2012 at 1:37 PM

That is exactly what I am proposing. I think the states should be allowed to compete, hence my reflexive distrust of federal-level solutions, constitutionality notwithstanding.

gryphon202 on April 29, 2012 at 1:32 PM

The picture is much larger than retail competition over 10% or less. State and local taxes are complementary to sales taxes. Toll highways add a great deal as does vehicle registration and utility taxation. A Federal law/approach would create more of an imbalance that one could imagine.

ericdijon on April 29, 2012 at 1:38 PM

The picture is much larger than retail competition over 10% or less. State and local taxes are complementary to sales taxes. Toll highways add a great deal as does vehicle registration and utility taxation. A Federal law/approach would create more of an imbalance that one could imagine.

ericdijon on April 29, 2012 at 1:38 PM

Tell me about it. Just because one CAN do a thing doesn’t mean that one SHOULD. Quite frankly, I’m happy with the status quo of paying sales tax on purchases I make from sellers/businesses in my home state, but let’s face it: I buy a lot of stuff like MP3′s, German-style board games, and high-end clothing that I can’t get here — period.

gryphon202 on April 29, 2012 at 1:41 PM

Typical middle class hating teahadist. Tax the middle class to death but let the upper 1% off scot-free. Pathetic you all are.

Uppereastside on April 29, 2012 at 1:41 PM

What does that have to do with state-level sales taxes?

gryphon202 on April 29, 2012 at 1:34 PM

If the federal government were constitutionally mandated to kick back a certain percentage of sales taxes collected to the states under a revamped federal system this would no longer be an issue. Under a federal sales tax internet companies would be charging customers for the tax and paying the federal government.

NotCoach on April 29, 2012 at 1:41 PM

Typical middle class hating teahadist. Tax the middle class to death but let the upper 1% off scot-free. Pathetic you all are.

Uppereastside on April 29, 2012 at 1:41 PM

Feel better now?

NotCoach on April 29, 2012 at 1:42 PM

I shop online because its cheaper. In fact, I have a much bigger selection.

Lets put it this way, if I have to pay tax on online stuff, then guess what, Ill buy even less. Not only do I not want to have to pay extra for shopping at a brick and mortar store…the tax on top of that makes stuff much more expensive. Selection usually stinks too at those stores.

Walmart has gotten a bit more of my businesses though recently with the site to store idea. Then I usually dont mind if its in line with what is online at amazon… even a few bucks more expensive.

Its all about the bottom line people… for me and many others. plus, why on EARTH would we want to give our fellow politicians even more of our money to pee away?

watertown on April 29, 2012 at 1:43 PM

If the federal government were constitutionally mandated to kick back a certain percentage of sales taxes collected to the states under a revamped federal system this would no longer be an issue. Under a federal sales tax internet companies would be charging customers for the tax and paying the federal government.

NotCoach on April 29, 2012 at 1:41 PM

That’s bass-ackwards, Butch. The states should be the taxing authority and kick money back to the federales. That’s how it was when America started, and that’s how I’d like to see it again.

gryphon202 on April 29, 2012 at 1:44 PM

It’s going to be a hard sell convincing conservatives that “more taxes” is ever the answer to anything, even if the money is supposed to be channeled to the states. But this situation needs to be settled sooner or later.

So, because Jazz is convinced more taxes are are necessary, it’s a fiat – more taxes are necessary?

Bullocks.

Jazz on April 29, 2012 at 1:46 PM

Tax the middle class to death but let the upper 1% off scot-free. Pathetic you all are.

Uppereastside on April 29, 2012 at 1:41 PM

I hate to let facts get in the way of your dementia, but the ‘upper 1%’ pay a higher tax rate than the middle class.

faraway on April 29, 2012 at 1:47 PM

gryphon202 on April 29, 2012 at 1:28 PM

The address the purchase is shipped to is the address that matters.

rose-of-sharon on April 29, 2012 at 1:31 PM

Thank you for the straight answer, Rose. I must have missed it. So as long as the taxation authority lies with whatever state the shipping address is in, I can have things shipped off-shore, or at least to the state with the most advantageous tax structure, and we’re back to the same question we’re asking now: How to make it “fair” and “close loopholes.” This is why I fear a federal solution may be deemed necessary. If some states turn around say “if you get it shipped here, you pay sales taxes here,” not all states must necessarily follow suit. And those that don’t will be at an advantage over those that do.

gryphon202 on April 29, 2012 at 1:49 PM

The Wal-Mart types killed off the small town retailers

cozmo on April 29, 2012 at 1:19 PM

Would you quit with the myths .Sheesh.

Uppereastside on April 29, 2012 at 1:41 PM

Heh was that even on topic.You’re just another loser like Lester with an empty frustrating life who comes here to vent.

CW on April 29, 2012 at 1:50 PM

Or, the states complaining about lost revenue could create a more business friendly environment to spur growth and opportunities …

Yah, I know. Crazy talk.

chimney sweep on April 29, 2012 at 1:50 PM

scot-free.
Uppereastside on April 29, 2012 at 1:41 PM

Do tell.

Talk about pathetic.

CW on April 29, 2012 at 1:51 PM

The Wal-Mart types killed off the small town retailers

cozmo on April 29, 2012 at 1:19 PM

Would you quit with the myths .Sheesh.

CW on April 29, 2012 at 1:50 PM

When I accused him of calling Wal-mart the enemy, he denied it. Isn’t that just cute?

gryphon202 on April 29, 2012 at 1:51 PM

That’s bass-ackwards, Butch. The states should be the taxing authority and kick money back to the federales. That’s how it was when America started, and that’s how I’d like to see it again.

gryphon202 on April 29, 2012 at 1:44 PM

Yet, you…how can I put this…oh yeah:

In case you haven’t noticed, I’d grudgingly accept a federal effort to regulate (make regular) this issue as constitutional, but my mistrust of those stumble-bum jerks in DC is rather reflexive. States can figure out on their own that if they demand more, they will end up with less. It’s virtually an immutable natural law of tax policy.

gryphon202 on April 29, 2012 at 1:26 PM

Because the feds are so good at it.

cozmo on April 29, 2012 at 1:52 PM

federal Internet tax moratorium that runs through 2014.

Tennessee just passed a fee that will run until 2014.

What is going to happen is that your Amazon receipt will look like a utilities bill.

Your item purchased price, plus shipping, plus a state tax, a county tax, a city tax, a local fee, a mystery fee, another mystery fee, etc etc….

Moesart on April 29, 2012 at 1:52 PM

gryphon202 on April 29, 2012 at 1:26 PM

Because the feds are so good at it.

cozmo on April 29, 2012 at 1:52 PM

I said I’d accept it as CONSTITUTIONAL. In case you hadn’t noticed, I also said my reflexive mistrust of the way DC manages to screw everything up leads me to hope that it doesn’t come to that. Constitutional =/= good idea. You can ask Mitt Romney about that.

gryphon202 on April 29, 2012 at 1:53 PM

Tennessee just passed a fee that will run until 2014.

What is going to happen is that your Amazon receipt will look like a utilities bill.

Your item purchased price, plus shipping, plus a state tax, a county tax, a city tax, a local fee, a mystery fee, another mystery fee, etc etc….

Moesart on April 29, 2012 at 1:52 PM

Just like the federales are already doing to our cell phone bills. Jeebus…

gryphon202 on April 29, 2012 at 1:54 PM

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